Is a Violation of the Anti-Kickback Law Also a Violation of the False Claims Act?

 

Stark Act Violations or Kickbacks Can Violate the False Claims Act

• Both the Stark Act and the Anti-Kickback Act prohibit a health care provider from submitting claims to Medicare based upon referrals from physicians who have a “financial relationship” with the health care entity, unless a statutory or regulatory exception or safe harbor applies. 42 U.S.C. §§ 1395nn(a)(1); 1320a-7b(b).  In particular, the Stark Act prohibits “knowingly and willfully” offering or paying “any remuneration . . . to any person to induce such person . . . to refer an individual to a person for the furnishing . . . of any item or service for which payment may be made in whole or in part under a Federal health care program.” 42 U.S.C. § 1320a-7b(b)(2)(A).  And it prohibits “knowingly and willfully solicit[ing] or receiv[ing]” kickbacks “in return” for such conduct.  Id. § 1320a-7b(b)(1)(A).
• The Stark Act expressly prohibits Medicare from paying claims that do not satisfy each of its requirements, including every element of any applicable exception.  42 U.S.C. §§1395nn(a)(1), (g)(1).
• “Falsely certifying compliance with the Stark or Anti-Kickback Acts in connection with a claim submitted to a federally funded insurance program is actionable under the FCA.” United States  ex rel. Kosenske v. Carlisle HMA, Inc., 554 F.3d 88, 95 (3d Cir. 2009) (citing United States ex rel. Schmidt v. Zimmer, Inc., 386 F.3d 235, 243 (3d Cir. 2004) (other citations omitted)).  Typically submission of a claim to Medicare requires the provider to certify compliance with the Anti-Kickback Law on CMS Form 855s, which states in relevant part “I understand that payment of a claim by Medicare is conditioned upon the claim and the underlying transaction complying with [Medicare] laws, regulations, and program instructions (including, but not limited to, the Federal [A]nti-[K]ickback [S]tatute . . . ), and on the supplier’s compliance with all applicable conditions of participation in Medicare.”
• In other words, a claim for payment made pursuant to an illegal kickback is false under the FCA. United States ex rel. Quinn v. Omnicare, Inc., 382 F.3d 432, 439 (3d Cir. 2004). It is well-settled that “claims for payment made pursuant to illegal kickbacks are false under the [FCA].” United States ex rel. Greenfield v. Medco Health Sols., Inc., 880 F.3d 89, 95 (3d Cir. 2018) (quoting United States ex rel. Westmoreland v. Amgen, Inc., 812 F. Supp. 2d 39, 52 (D. Mass. 2011)).  When a claim is tainted by an AKS violation, it is automatically legally “false” under the FCA. Greenfield, 880 F.3d at 95. Therefore, once a violation of the AKS has been established, the first element of the FCA, falsity, has been met.
• A defendant can avoid liability under the Stark Act by demonstrating that either a statutory or regulatory exception (or safe harbor) applies.  The safe harbor exceptions recognize that financial arrangements between physicians and health care entities may exist for legitimate reasons independent of referrals.

Note that opposing kickbacks or raising concerns about kickbacks is protected conduct under the False Claims Act anti-retaliation provision.  For more information about False Claims Act whistleblower protection, click here.

For more information about the False Claims Act, Anti-Kickback Statute, Physician Self-Referral Law, and Exclusion Statute, see the HHS OIG’s roadmap for physicians about fraud and abuse laws.

As explained in a recent DOJ press release, “The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs.  The Physician Self-Referral Law, commonly known as the Stark Law, prohibits a hospital from billing Medicare for certain services referred by physicians with whom the hospital has an improper financial arrangement, including the payment of compensation that exceeds the fair market value of the services actually provided by the physician.  Both the Anti-Kickback Statute and the Stark Law are intended to ensure that physicians’ medical judgments are not compromised by improper financial incentives and instead are based on the best interests of their patients. Claims submitted under the Anti-Kickback Statute and the Stark Law violate the False Claims Act.”

Kickback Whistleblower Need Not Prove “but for” Causation

Recently the Third Circuit rejected a provider’s contention that a kickback is actionable under the FCA only where the relator provides that the kickback actually influenced a patient’s or medical professional’s decision to use a particular provider.  In Steve Greenfield v. Medco Health Solutions Inc., the Third Circuit held that a kickback qui tam can be proven by showing that a claim was submitted for reimbursement for medical care that was provided in violation of the Anti-Kickback Statute (as a kickback renders a subsequent claim ineligible for payment).  But the court noted that “[a] kickback does not morph into a false claim unless a particular patient is exposed to an illegal recommendation or referral and a provider submits a claim for reimbursement pertaining to that patient.”

In June 2019, Rialto Capital Management LLC (Rialto) and its former affiliate RL BB-IN KRE LLC (RL BB) agreed to pay $3.6 million to resolve allegations that Rialto and the Kentuckiana Medical Center (KMC), an Indiana-based hospital owned by RL BB, violated the Anti-Kickback Statute, the Stark Law, and the False Claims Act by engaging in illegal financial arrangements with two doctors who referred patients to KMC. According to the DOJ’s press release, “KMC, under the direction of Rialto, provided personal loans to two referring doctors and then repeatedly forbore from requiring repayment of those loans” and “the hospital’s failure to collect on loans to key referral sources constituted a form of remuneration prohibited by both the AKS and the Stark Law.”

False Claims Act Qui Tam Whistleblower Attorneys

The experienced whistleblower attorneys at leading whistleblower law firm Zuckerman Law represent whistleblowers disclosing fraud and other wrongdoing at government contractors and grantees.  Firm Principal Jason Zuckerman has secured relief for qui tam whistleblowers in FCA cases disclosing education loan fraud, Medicare billing fraud, and off-label marketing.

To schedule a free preliminary consultation, click here or call us at 202-262-8959.

Our experience includes:

• Representing whistleblowers in actions concerning off-label marketing, false billing, and education loan fraud (inflating entitlement to interest rate subsidies).
• Representing whistleblowers in NDAA retaliation claims before the Department of Defense, and Department of Homeland Security, Department of Justice Offices of Inspectors General.
• Representing whistleblowers disclosing fraud on the government in Congressional investigations.

In addition, we have substantial experience representing whistleblowers under the Whistleblower Protection Act (WPA) and enforcing the WPA, the law that the NDAA whistleblower provisions are based upon.

Anti-Kickback Statute and Stark Law

The Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b) “is a criminal statute prohibiting the knowing or willful offering to pay, or soliciting, any remuneration to induce the referral of an individual for items or services that may be paid for by a federal health care program.” United States ex rel. Nunnally v. W. Calcasieu Cameron Hosp., 519 F. App’x 890, 893 (5th Cir. 2013) (per curiam) (citing 42 U.S.C. § 1320a-7b(b)(1-2); United States ex rel. Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d 899, 901 (5th Cir. 1997)).

The Stark Law, 42 U.S.C. § 1395nn, and its regulations, 42 C.F.R. § 411.350 et seq., provide that, if a physician has a “financial relationship” with an entity (that is, an ownership or investment interest or a “compensation arrangement”), then that physician generally cannot make a referral to the entity for the furnishing of “designated health services” for which payment may be made under Medicare or Medicaid, and “the entity may not present or cause to be presented a claim under [Medicare or Medicaid] or bill to any individual, third party payor, or other entity for designated health services furnished pursuant to a referral prohibited” by the Stark Law, 42 U.S.C. § 1395nn(a)(1).